Wyoming Utility Token inside of a Federally exempt offering provides a state exemption to what are called, “Open Blockchain Tokens.” This is broadly interpreted as the Utility Token that is commonly used throughout the Blockchain world. The significance of this bill is that, for the first time in the United States, there is a legislative definition from one of the states of what constitutes a Utility Token. Wyoming Enrolled Act №27 Disclaimer: Please let it be known that this article is not legal advice nor am I a lawyer. I am an engineer/financier/enthusiast that seeks to have command of the laws for the protection of the projects that I am working on. My goal with this article is to inform those planning similar projects of how NODE Haven is seeking to comply with the current status of regulation while also planning for the future. The SEC, however, has yet to provide a similar definition of what qualifies a Utility Token as a non-security. This has created ambiguity and limits the ability to use the Wyoming exemption. Following a discussion with an SEC representative concerning the use of the Wyoming definition, it is our understanding that it is up to the Utility Token issuer to determine whether or not the token constitutes a non-security. This makes it very risky to issue Utility Tokens to the general public of the United States, especially if the tokens are not fully functional and usable as the exact time of sale. So, you might ask, “How do I utilize the Wyoming Open Blockchain Token exemption?” In order to pass-through to the state exemption a proper exemption on the federal level must be used because interstate communication (i.e. Internet) is used to make the offer of securities. The exemption that we are aware of that allows this type of pass-through is called . The “Safe Harbor” outlined in the bill summarily requires both the business issuing the securities and all of the purchasers of the securities to reside in the same state. Loop-holes, such as single-purpose LLCs expressely created to purchase exempt securities, are closed. We took this to mean that one must stay true to the essence of the intrastate offering to qualify. Not only that, the company must conduct a great majority (80% of revenue/operations or majority of employees in state) of the business operations within the state during and after the sale of the exempt securities. We also took this to mean that none of the Utility Tokens could pass beyond state lines or be traded on exchanges open to entire United States. Securities Act Rule 147 and 147A Do to the restrictions that Rule 147A would have placed upon the sale of NODE tokens, the operations of NODE Haven and the restriction of trade to only those residing in Wyoming, we have decided against using the federal exemption to pass through to the Wyoming state exemption. To come to this conclusion, NODE Haven referred to our mission to . Although the state exemption would have allowed the general public within Wyoming to participate in the NODE token sale, it would have barred individuals and companies in other states and territories of the United States to participate. make advanced technologies accessible to everyone Without a federal exemption allowing pass-through to state exemption the NODE token sale is subject to comply with federal securities laws. The question for ourselves was, “How do we comply with federal law, honor the legislative definition of Utility Token in Wyoming and follow our mission as closely as possible?” After much discussion we settled on the following plan: The design of the NODE token itself will follow the guidelines presented in Wyoming Act №27 United States persons (home or abroad) will be offered an exempt offering under Reg D 506C requiring accredited investors Foreign purchasers are made offerings under Regulation S NODE Haven understands the SEC is here to protect the investors of the United States and we plan to fully comply with their mission. We knew from the outset, that the sale of Utility Tokens when there is no immediate use for the token constitutes a security. There is trust there and a promise of future goods/services that are not available at the time of the sale. When we spoke to the SEC we were told that they would not opine about how the tokens are viewed in the future. We were also notified that any attempt to push the sale or dividend of tokens into the future within the security is in reality a purchase of tokens today, thus making the tokens themselves securities. This means that the NODE tokens sold in accordance to the Reg D 506C exemption have the same restrictions as any other Reg D 506C exempt security. The Reg D 506C exemption allows for the offer of restricted securities to accredited investors. This restriction forbids the transfer of the security between parties during the first year. Even after the first year the the restrictive legend must be removed in order to transfer the securities, being the NODE tokens. There is a good post that goes into detail about these restrictions and how they apply to token sales . Given this, you might ask, “How does NODE Haven restrict the transfer of the NODE token which is an ERC20 token while still allowing the use of the NODE token on the platform?” here The NODE tokens issued as part of the Reg D 506C offering have to follow the restrictions imposed as part of the exemption. In order to impose the restriction upon the ERC20 NODE token, NODE Haven will prevent the transfer of tokens by issuing the tokens to a smartcontract that will hold the tokens purchased as part of the security. The purchaser will not have the ability to transfer the NODE other then to purchase services/goods on the platform for commercial use. The NODE tokens will not go to the purchasers wallet during the restricted period as at that point the purchaser could transfer the ERC20 tokens freely. The smartcontract will, in essence, be a digital counterpart to the restrictive legend that blocks the transfer of the tokens. NODE Haven does plan to have products/services available on the platform for reservation/purchase before the year restriction is lifted. Because of this, the NODE tokens owned by the purchaser will have the same utilities of reservation and purchase of equipment while being in the smartcontract. This maintains the functionality of the Product Development Vehicle while also adhering to the federal law. The NODE tokens will be concurrently sold as a Reg D 506C exempt offering as well as a Regulation S exempt offering. Know-your-customer and AML screening will be done before the purchaser has access to either offering. This will ensure that United States persons will not have access to the Regulation S offering. The regulations that are imposed upon foreign purchasers of the Regulation S offering will be adhered based on the laws of the country that they are subject. NODE Haven will not take steps to have NODE tokens listed to foreign exchanges that allow United States persons. NODE Haven will also take steps to stop any and all trade of the NODE tokens in the United States unless the trade is in compliance with federal securities law. Commentary: We wanted to make the reader aware of the key differentiators between the Wyoming Utility Token exemption and the federal Reg D 506C exemption. Wyoming law does not have an accredited investor restriction like the Reg D 506C exempt offering. Because of the accredited investor restriction, the general United States public cannot participate in many revolutionary Blockchain projects. While there are ways for security tokens (STO) to be issued to the United States public, they are cost prohibitive for developers that may be self-funding their projects. The Wyoming Act №27 allows transfer of the Utility Token when there is a consumptive purpose or more simply has goods/services available for purchase with the token. The Reg D 506C exempted security is restricted for sale until a 1 year period has lapsed since time of sale. Methods to stop transfer in each case are different although both are feasible. In the case of the Wyoming Act №27 Utility Token a pause would be instituted on all tokens until the platform is developed and goods/services are available for purchase with the token. In the NODE token case, a smartcontract will be used to stop transfer of the Reg D 506C exempt security while still maintaining functionality. Bounties, which are a common way for developers to market their token sales by giving tokens in exchange for services, are much simpler to execute under the Wyoming ACT №27 as the tokens are not treated as securities. Under Reg D 506C exemption bounties would require that hunters be accredited investors in the United States or rule 701 to be followed which is impractical. Thus no bounty programs will be offered to United States persons. Please visit us at our , or by Email: contact@nodehaven.com Website Telegram We are here to help others make the move to Wyoming and for us there is no added risk. The federal regulations are in place to protect United States investors and NODE Haven plans to comply fully with the law. We also believe that we have a workable solution that allows purchasers of NODE tokens as part of the Reg D 506C offering to use them on the platform to purchase goods and services even while the security is restricted. Please also take into consideration that we are following Rule 506c of Regulation D that requires United States persons to be “accredited investors.” Verification will be done through a third-party . Concurrently, there is a Regulation S offering being made to foreign persons. We will always comply with SEC regulations even while being defined legislatively by Wyoming as a Utility Token. Our hope is that the SEC will adopt a similar exemption for Utility Tokens, but until then NODE Haven will take all necessary steps to comply with existing United States federal securities law. verifyinvestor.com Thanks again to everyone that put in the work to make the Wyoming Enrolled Act №27 a reality!

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